Serials Price Projections and Cost History

Serials Price Projections and Cost History

Serials Prices 2003-2007 with Projections for 2008 July 15, 2007Serials Price Projections and Cost History

2008 Price ProjectionsEBSCO uses recent information received from publishers and historical price data to project price increases for the upcoming year. As always, it is prudent to be cautious in price projections as we must rely primarily on historical trends and current estimates. Overall, the pricing information received as of the date of this release indicates base publisher price increases for 2008 will be similar to those of 2007. The projected base price increase (before currency impact) for academic and academic medical libraries is 6 to 8 percent.

Pricing FactorsMany factors affect serials prices each year – technology and electronic hosting costs for online titles, currency exchange rates, postage and handling costs related to print titles, changes to publisher pricing models, increases in pages and/or volumes, and overall general inflation. It is noteworthy that this year the U.S. Postal Service is increasing postal rates between 11% and 17% depending on the class of mail. This will have a significant impact on the postage component of print prices. Finally, the take-over of titles of one publisher by another can also significantly impact journal pricing.As stated above, costs associated with online hosting of e-journals and investments in the latest technologies can impact electronic journal prices. The shift toward electronic information has also given publishers an opportunity to find new and unique pricing models for their content. Whether it is packaged content, standard tier pricing or customized deals, publishers are looking for the best way to cover costs and maximize profits. This can often mean significant effective price increases overall but smaller price increases at the individual journal level. For example, bundling or packaging titles often translates into the concept of “more for pro-rata less.” The result is a lower price per title but an overall increase in expenditure. Prices per title may go down but overall spend may outpace normal journal inflation.

Currency ImpactIt is difficult to project the impact that currency rates will have on publisher price increases as currency markets are volatile. Over the past 12 months, the U.S. dollar has weakened against both the euro and the pound. The U.S. dollar is roughly 5 percent weaker today against the euro and the pound than in the fall of 2006 when customers were invoiced and publishers were paid.This is the second consecutive year of the dollar weakening versus the euro and pound. The overall decline of the dollar vs. these two currencies over the past 24 months has been roughly 10%. Opinions vary as to when or if the trend of a weakening dollar will end. The positive economic outlook in Europe, as well as slightly higher interest rates than those in the U.S., contributes to the strength of the euro and pound. If the value of the dollar continues to decline relative to other currencies, this could be positive news for customers outside the U.S. purchasing U.S. dollar priced journals. For example, customers whose invoicing currency is euros or pounds could likely see price increases below the base increase for U.S. journals. Conversely, the weak U.S. dollar could result in higher price increases for U.S. customers buying material priced by publishers in non-U.S. currencies.Customers in Australia, New Zealand and Canada should see price increases at or below the base increase for materials priced in U.S dollars due to the strengthening of these currencies vs. the U.S. dollar. However, customers in South Africa may well see price increases for European materials at or above the base increase due to the decreased value of the rand versus the euro and pound.Based on the value of the U.S. dollar at this writing (July 2007) relative to the euro and the pound versus the value of the U.S. dollar last fall when orders and payments were sent to publishers and last summer when many of the larger non-U.S. publishers set U.S. dollar prices, we estimate overall price increases of 11 to 13 percent for customers paying in U.S. dollars for non-U.S. dollar priced titles. It is important to note that a relatively small proportion of non-U.S. titles are priced by the publishers in non-U.S. currencies for the U.S. market. Most of the large international publishers that have been traditionally thought of as “European” set their prices in U.S. dollars for the U.S. market. Therefore, in more recent times their price increases have been less impacted by the rise and fall of the U.S. dollar versus the euro and the pound each year. Additionally, the globalization of publishers and the lack of transparency in foreign currency hedging techniques these publishers employ make projecting prices more difficult.See the following chart, Projected Price Increase by Customer Billing Currency, for more information. Generally, an increase of more than 6 to 8 percent reflects an adverse currency impact, and an increase of less than 6 to 8 percent reflects a favorable currency impact.

Projected Price Increase by Customer Billing Currency

Billing Currency

U.S. Journals %

U.K. Journals %

European Journals %

Australian dollar

4 to 6

10 to 12

11 to 13

British pound

1 to 3

6 to 8

6 to 8

Canadian dollar

1 to 3

5 to 7

5 to 7

Euro

1 to 3

6 to 8

6 to 8

New Zealand dollar

5 to 7

8 to 10

8 to 10

South African rand

12 to 14

18 to 20

19 to 21

U.S. dollar

6 to 8

11 to 13

11 to 13

Conservative BudgetingAs always, EBSCO recommends customers add 2 to 4 percent to the estimated price increases when budgeting to protect themselves from a weakening of the currency in which they are invoiced between now and the time subscription payments are paid. The currency exchange environment is difficult to project. EBSCO continually communicates with major publishers regarding projected price increases and monitors world currency exchange rates. Should we see major developments in these areas, we will update our information regarding projections. As mentioned above, these price projections are for individual print and electronic journals and do not consider overall spending related to purchasing e-packages which may result in effective spending increases above the averages presented in the table.Historical Price Data by Library TypeThe chart Five Year Journal Price Increase History (2003-2007) - PDF shows price fluctuations over the last five years for typical library lists invoiced in U.S. dollars. Data for each library type is based on a merged list of titles ordered by representative libraries purchasing in U.S. dollars. Each list is based on the actual ordering patterns of the libraries in the sample.

An analysis of 2007 subscription prices for customers paying in U.S. dollars indicates an average increase over 2006 prices ranging from 3.00 to 8.42 percent. Association of Research Libraries (ARL) institutions experienced an average price increase of 8.30 percent; college and university libraries an average increase of 7.99 percent; and academic medical libraries an average increase of 8.42 percent. These figures are based on a weighted average of the actual ordering patterns of a significant number of representative libraries purchasing both U.S. and non-U.S. titles in U.S. dollars. Other Budgeting ToolsEBSCO provides price projections to assist customers in forecasting the effect of future serials costs on their budgets. These projections should be used as one tool in the budgeting process. EBSCO offers other budgeting and collection analysis tools that provide information specific to a customer’s collection. Some of the serials management reports offered are:

The Historical Price Analysis report, which tracks the cost of all titles ordered through EBSCO over a specified period of time and provides percentage-of-change comparisons;

The Online Availability Report (with estimated prices), which lists journals on order with EBSCO that are available online either in combination with or separate from the print subscription (displays each publisher’s access requirements and the institutional rate for the online journal); and

Collection Development and Assessment Reports, which allow customers to evaluate the importance of particular titles to their collections.

Please contact the EBSCO Regional Office nearest you for more information about these reports.